The stock market for special purpose acquisition companies (SPACs) in Korea is stable after experiencing price fluctuations when regulations were eased. SPACs are publicly traded shell corporations that raise capital to acquire or merge with existing companies. Most SPACs debut at a public offering price of 2,000 won per share to make mergers and acquisitions easier.
There were concerns about the stability of SPAC debuts due to extreme price fluctuations after the limit of the quotation price for IPOs was eased. However, the Korea Exchange (KRX) dismisses these concerns and states that the SPAC market has remained stable.
Since the regulatory easing, seven new SPACs have been listed on Kosdaq, the tech-heavy secondary bourse in Korea. Although some of them experienced significant price increases on their first trading day, their prices have been relatively stable recently.
The KRX also mentions that stock IPOs have remained stable. Initially, some IPO deals saw prices surge above 300% on the first trading day, but more recent debuts have shown moderate flows, with some even closing below their offered prices.
According to a KRX official, the initial surge in prices reflected investors’ anticipation, but as investors better understand the regulations, SPACs are exhibiting more moderate price movements.
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